Effort to Ax Tax-Delinquent Feds Draws Fire

Yeah, I'll bet it did.

Proposed legislation that would require the firing of federal employees with outstanding IRS tax liens drew a lot of criticism at a March 17 hearing on the bill before the House Oversight and Government Reform Subcommittee on the Federal Workforce.

Under the bill, any fed with an outstanding personal tax debt that has triggered a wage or property lien would be subject to termination. Prospective employees with tax liens would similarly be banned from federal employment.

Among those who took shots at the bill, H.R. 4735, was National Treasury Employees Union President Colleen Kelley, who said the bill would deny federal employees the due process rights enjoyed by other taxpayers. Kelley also noted that the issuance of a lien, which under the proposed measure could get a fed fired, is not necessarily a final determination of tax liability.

She also pointed out another obvious shortcoming—if anything, the bill would hinder feds from repaying those back taxes. “We believe that terminating their employment or preventing them from obtaining gainful employment would only serve to worsen their financial situation and lessen their ability to repay,” Kelley said.

J. Ward Morrow, American Federation of Government Employees assistant general counsel for legislation, concurred. “If an individual is unemployed, they will be in default for a far longer period of time and have less incentive to pay any payments,” Morrow said. “To erect a permanent barrier to any federal employment would be counter to the desire to get the debt paid.”

There are also potential technical problems with the proposed bill introduced by Rep. Jason Chaffetz, R-Utah. Christopher Rizek, a tax expert and adjunct professor at the Georgetown University Law Center, said that credit and loss carryovers can erase existing tax liabilities. And, in certain instances, he said, litigation over the existence or amount of a tax liability may even be occurring at the time the IRS files an outstanding assessment or tax lien.

To see more, go to: http://tinyurl.com/ylnco4m.